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Relative strength (performance vs the market)

Relative strength measures a stock against the market rather than against zero — a 12% gain is a poor result in a market that rose 20%.

Relative strength asks a different question from a plain return. A return tells you the stock rose 12% over six months; relative strength tells you the market rose 20% over the same six months, so the stock actually lost eight percentage points of ground to simply owning the index. The figure is the stock’s return minus the market’s return over exactly the same window, quoted in percentage points: +6 means six points ahead of the market, −6 means six points behind.

Because it is a difference between two percentages, it is quoted in "percentage points" rather than percent — calling a six-point gap "6%" invites confusion with the stock’s own return. A stock can have positive relative strength while falling (it fell less than the market did) and negative relative strength while rising (it rose less). Both situations are common and neither is visible in the return alone.

stocks-llm compares each US-listed company against a broad US market benchmark over 1, 3, 6 and 12 months, recomputed nightly from delayed daily-close prices, and quotes both legs so you can see whether the market rose or fell. A company whose price history does not cover the full window is left out rather than reported over a shorter one, and companies whose price series carries a known unrepaired break are excluded entirely. Relative strength describes performance that has already happened — it is context, not a prediction or a recommendation.

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Related terms

  • Moving average (50-day & 200-day) — A moving average smooths a stock’s price by averaging its recent closing prices — the 50-day and 200-day are the most-watched trend lines.
  • Golden cross — A golden cross occurs when a stock’s 50-day moving average crosses above its 200-day moving average — a widely-watched long-term momentum shift.
  • Death cross — A death cross occurs when a stock’s 50-day moving average crosses below its 200-day moving average — the bearish counterpart of a golden cross.
  • RSI (Relative Strength Index) — The RSI is a 0–100 momentum oscillator that measures how fast a stock’s price has risen or fallen recently; readings below 30 are "oversold" and above 70 "overbought."
  • Overbought & oversold — "Overbought" and "oversold" describe a stock whose price has moved up or down unusually fast recently — most commonly measured with a 14-day RSI above 70 or below 30.

See more terms in the stocks-llm glossary.

Informational only — NOT financial advice. This is an educational definition, not a recommendation to buy or sell anything. Metrics on stocks-llm are delayed data and may be missing or stale. Always verify information independently and consult a qualified financial professional before making any investment decision.

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Informational only — NOT financial advice.

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